Overview

Labour Force Trends – Ontario employment showed a solid gain in May

Monthly job growth in full-time (+40,100) more than offset a decline of part-time work (-18,400)

The unemployment rate decreased to 6.6%

The unemployment rate for youth aged 15 to 24 dropped to 13.6%

Ontario’s employment had a solid showing in May 2016 increasing 21,600, continuing a volatile yet overall positive 2016 so far. Employment gains came entirely from full-time employment (+40,100) which more than covered losses in part-time work (-18,400). Individuals exited the labour force (-10,100) in May, contributing to the province’s participation rate dropping to 65.2%. However, the solid employment gain ensured the unemployment rate declined 0.4 percentage points to 6.6%, remaining below the national average of 6.9%.

Nationally, employment saw a fair increase of 13,800 compared to April 2016. Canada’s latest increase in employment came entirely from a large full-time employment gain as part-time work declined. Ontario and Quebec were the key contributors to this month’s gain, while Alberta experienced yet another sizeable decline. The unemployment rate dropped 0.2 percentage points to 6.9%.

U.S. nonfarm payroll employment grew by a very weak 38,000 in May, significantly lower than the expected 164,000 and the lowest employment growth since 2010. Even when taking into account the 40,000 Verizon workers on strike, the figure remains quite weak.Footnote1 Furthermore, April’s figure was revised downwards from 160,000 to 123,000.Footnote2 Despite the optimism from an unemployment rate drop to 4.7%, the U.S. Federal Reserve continues to hold its benchmark interest rate steady, and economists seem to have lost faith that a rate hike will come sooner rather than later.Footnote3 This latest employment figure may yet again delay rate hike expectations.Footnote4

Between May 2015 and May 2016, Ontario employment grew by 78,800, with the entirety of the growth coming from full-time employment (+81,400) with part-time work (-2,600) seeing a slight decline. While the unemployment rate inched up by only 0.1 percentage point over the 12 months, the labour force participation rate was unchanged since May 2015 and remains at relatively lower levels.

The Ontario unemployment rate for youth aged 15 to 24 dropped sharply by 1 percentage point to 13.6% between May 2015 and May 2016, with decreases for both males and females (-0.8 percentage points and -1.1 percentage points, respectively). While still higher, the provincial rate in May 2016 improved significantly against the national average of 13.3%.

Student summer employment increased in Ontario compared to a year ago. During the summer months, Statistics Canada collects labour market data on youth aged 15 to 24 who were full-time students in March and who plan to return to school full-time in the fall semester. Student employment increased in May 2016 to 425,900; 20,900 higher (+5.2%)4 compared to May 2015. The unemployment rate amongst returning students declined by a significant 4.3 percentage points to 18.4%, which coupled with rising participation and employment rates imply more of these students were able to secure work compared to last year. Since June and July typically see more students searching for and taking on jobs once the school year ends, it will be interesting to see if this positive trend continues. Although the provincial student unemployment rate remains higher, it is much improved against the national student rate of 17.3% compared to a year ago.

Employment by Industry

Employment in the goods-producing sector grew thanks to gains in construction

Ontario’s goods-producing sector bounced back in May following a weak showing in April. Employment grew by 20,300 compared to April 2016, with gains in construction (+24,600) and manufacturing (+4,100). Losses were recorded in forestry, fishing, mining, quarrying, oil and gas (-5,700), utilities (-1,400), and agriculture (-1,200).

A number of new infrastructure construction projects were announced all across Ontario in May. They include an investment of over $57M into Ottawa’s Rideau Canal National Historic Site,Footnote5 an investment of over $7.6M to upgrade the water infrastructure and to repair roads in the Hastings County,Footnote6 and an investment of $39.2M in four highway projects in northwestern Ontario.Footnote7 Projects for the construction of educational institutions also made news.Footnote8,Footnote9 However, the values of Ontario building permits decreased by 17.5% in the 12 months ending April, with the declines coming entirely from non-residential permits. Housing starts in Ontario also slowed in May compared to the previous month.Footnote10

Ontario manufacturers continued to be optimistic, as the May RBC Manufacturing Purchasing Managers’ Index (PMI) remained in expansionary territory.Footnote11 However, business outlooks were constrained by concerns about rising input costs and competitive pressures.Footnote12 The motor vehicle parts manufacturing sub-industry saw a boost when the Government of Ontario announced that it will invest over $7.8M in seven automotive supply companies in the Windsor-Essex region, creating 270 jobs.Footnote13 This investment will support Ontario’s automobile manufacturers, who have increased their total light vehicle production by 16.3% in April 2016 compared to the same time last year.Footnote14

Over the past year, employment in the goods-producing sector grew by 22,000. Gains were registered in construction (+32,600), agriculture (+2,200), and manufacturing (+1,400), while losses came from forestry, fishing, mining, quarrying, oil and gas (-12,000) and utilities (-2,100).

Employment in the services-producing sector remained flat

Growth stalled in the services-producing sector, with provincial employment increasing by just 1,400 in May. The trade industry accounted for the largest employment loss (-16,300), while the public administration (+8,500) and other services (+7,800) recorded the biggest gains.

Employment in the wholesale and retail trade industry declined in May. Several retail store closures, including AéropostaleFootnote15 and Ben Moss Jewellers,Footnote16 likely contributed to the employment drop. On the wholesale side, pharmaceutical supply company McKesson Canada announced that it is closing its distribution centre in Chatham on July 8, affecting 43 jobs.Footnote17 Despite these closures, consumer confidence remains high in Ontario, though expectations largely reflect the strength in the housing market.Footnote18

While the accommodation and food services industry recorded a small employment increase of 2,400, significant news came from McDonald’s Canada in May. The company will start table service in restaurants and add 2,700 jobs in Ontario as part of its modernization drive.Footnote19 Across the province, a number of other eateries have also undergone expansions.Footnote20,Footnote21,Footnote22

The services-producing sector employment saw an increase of 56,900 in May 2016 compared to May 2015. Accommodation and food services (+21,700), professional, scientific and technical services (+21,400), and health care and social assistance (+21,200) led the province in growth. Gains were moderated by declines in wholesale and retail trade (-31,000), business, building and other support services (-12,100), and educational services (-11,500).

Ontario Monthly Labour Force Statistics, by Industry

Seasonally adjusted data ('000)

May 2016

April 2016

May 2015

Monthly variation

Yearly variation

Number

%

Number

%

Total employed, all industries

7,006.9

6,985.3

6,928.1

21.6

0.3

95.7

1.1

Goods–producing sector

1,426.2

1,405.9

1,404.2

20.3

1.4

22.0

1.6

Agriculture

79.1

80.3

76.9

-1.2

-1.5

2.2

2.9

Forestry, fishing, mining, quarrying, oil and gas

34.5

40.2

46.5

-5.7

-14.2

-12.0

-25.8

Utilities

48.7

50.1

50.8

-1.4

-2.8

-2.1

-4.1

Construction

510.5

485.9

477.9

24.6

5.1

32.6

6.8

Manufacturing

753.4

749.3

752.0

4.1

0.5

1.4

0.2

Services–producing sector

5,580.8

5,579.4

5,523.9

1.4

0.0

56.9

1.0

Trade

1,027.1

1,043.4

1,058.1

-16.3

-1.6

-31.0

-2.9

Transportation and warehousing

329.5

332.2

319.6

-2.7

-0.8

9.9

3.1

Finance, insurance, real estate and leasing

557.3

556.1

545.1

1.2

0.2

12.2

2.2

Professional, scientific and technical services

593.8

600.6

572.4

-6.8

-1.1

21.4

3.7

Business, building and other support services

324.0

323.9

336.1

0.1

0.0

-12.1

-3.6

Educational services

507.3

501.7

518.8

5.6

1.1

-11.5

-2.2

Health care and social assistance

830.1

834.5

808.9

-4.4

-0.5

21.2

2.6

Information, culture and recreation

311.6

305.5

311.1

6.1

2.0

0.5

0.2

Accommodation and food services

462.0

459.6

440.3

2.4

0.5

21.7

4.9

Other services

278.5

270.7

271.9

7.8

2.9

6.6

2.4

Public administration

359.5

351.0

341.6

8.5

2.4

17.9

5.2

Note: Totals may not add due to rounding

Source: Statistics Canada Labour Force Survey – CANSIM Table 282‐0088

Regional Analysis

Job gains continue to weaken in Toronto

Employment in the Toronto economic region grew by 93,100 (+2.8%) between May 2015 and May 2016 (measured on a year-over-year, seasonally unadjusted basis), driven mostly by additions in full-time positions. Despite this increase, there has been a consistent weakening in the year-over-year employment gains in Toronto since February 2016. The participation rate edged up by 0.7 percentage points to 66.8% in May 2016, while the unemployment rate was unchanged over the year.

The finance, insurance, real estate, rental and leasing, and construction sectors in the region reported the strongest job growth in the period. Within construction, many large-scale residential, non-residential and infrastructure projects continue to be undertaken in various areas of the region which are supporting this growth. For example, the $21M construction project currently underway by Cadillac Fairview Corporation Ltd. to improve its CF Shops at Don Mills in North York,Footnote23 and the start of construction on a new fire station in Bolton.Footnote24 Looking ahead, investments such as the $14M allocated by The Regional Municipality of York towards construction work at four local hospitals,Footnote25 bode well for the vibrancy of the sector in this region.

There was also good news in regional retail trade, with already and planned opening of stores including Reiss,Footnote26Canada Goose Inc.Footnote27 and MackageFootnote28 at various shopping centres. However, on the negative side overall, 78 jobs will be lost when Transat A.T. Inc., a tour operator for Air Transat, closes its Toronto call centre in September.Footnote29

Employment increased by 1,800 jobs (+0.9%) in the Kingston-Pembroke economic region over the past year, which was the largest gain since January 2015. The region’s labour market is benefitting from several notable projects including construction on the new $40M-Shorelines Casino Belleville facilityFootnote30 and the Government of Canada’s announced $800M-investment in Chalk River’s Canadian Nuclear Laboratories,Footnote31 which should have significant spin-off benefits.

The regional manufacturing sector will benefit from Bombardier Inc. shifting production of its Metrolinx contract to Kingston from Sudbury in October,Footnote32 while the food processing cluster is receiving a boost as Frulact Canada Inc. began accepting applications for its fruit plant, scheduled to open this fall.Footnote33 Other regional business expansions by Cancoil Thermal Corporation in KingstonFootnote34 and Berry Plastics Canada Inc. in BellevilleFootnote35 should more than offset the news that Nestlé Canada laid off 23 workers at its Trenton factory.Footnote36

Between May 2015 and May 2016, employment gains were also reported in Ottawa, Kitchener-Waterloo-Barrie, London, Northeast and Northwest economic regions.

Employment conditions were unchanged in the Hamilton-Niagara Peninsula economic region over the past year. However, the region’s prominent manufacturing hub received good news as GE Canada is building a new gas-engine manufacturing facility in WellandFootnote37 and Vulcraft Canada, Inc. began constructing a new steel products manufacturing facility in Ancaster.Footnote38 This bodes well for the region going forward.

Employment losses were reported in three economic regions

The Windsor-Sarnia economic region sustained job losses over the year (-4,200) and the unemployment rate fell to 7.1% in May 2016 as less people participated in the workforce. The region will be further weakened when McKesson Canada closes its distribution centre in Chatham.Footnote39 Despite the losses, the region remains a significant contributor to manufacturing employment in Ontario. Several recent investments,Footnote40 as well as, the acquisition of Radix Inc. by Active Industrial Solutions in Tecumseh,Footnote41 and the merger between Caxton Mark Inc. and MGI Ltd., two label manufacturers in Leamington,Footnote42 should help boost the sector and overall employment in the area.

Between May 2015 and May 2016, employment losses were also reported in Muskoka-Kawarthas, and Stratford-Bruce Peninsula economic regions.

Ontario Monthly Labour Force Statistics, by Economic Region

3‐month moving averages seasonally unadjusted data

Employment

Unemployment rate

May 2016 ('000)

May 2015 ('000)

Yearly variation(%)

May 2016 (%)

May 2015 (%)

Yearly variation(% points)

Ontario

6,962.5

6,870.9

1.3

6.9

7.0

-0.1

Economic Regions

Ottawa

687.7

686.3

0.2

7.0

6.4

0.6

Kingston—Pembroke

205.2

203.4

0.9

7.1

8.3

-1.2

Muskoka—Kawarthas

165.7

174.7

-5.2

6.0

10.3

-4.3

Toronto

3,365.7

3,272.6

2.8

7.2

7.2

0.0

Kitchener—Waterloo—Barrie

712.4

704.9

1.1

5.9

6.2

-0.3

Hamilton—Niagara Peninsula

710.7

710.7

0.0

6.7

5.8

0.9

London

333.6

320.2

4.2

6.4

5.7

0.7

Windsor—Sarnia

297.2

301.4

-1.4

7.1

9.3

-2.2

Stratford—Bruce Peninsula

138.7

154.6

-10.3

5.6

5.3

0.3

Northeast

246.6

246.4

0.1

8.3

7.9

0.4

Northwest

98.9

95.8

3.2

8.3

6.5

1.8

Source: Statistics Canada Labour Force Survey – CANSIM Table 282‐0122

Note: Totals may not add due to rounding

Note

In preparing this document, the authors have taken care to provide clients with labour market information that is timely and accurate at the time of publication. Since labour market conditions are dynamic, some of the information presented here may have changed since this document was published. Users are encouraged to also refer to other sources for additional information on the local economy and labour market. Information contained in this document does not necessarily reflect official policies of Employment and Social Development Canada.